@stock-student wrote:pls add your valuble thoughts regarding DFCC.
I have 5000 shares at 190 average & now it's around 157.
this has been decline after there bonus issue .
pls advise will this be furthre going down or worth to holding another few months
This year DFCC has declared a dividend of Rs. 10/-. There has been a shrinkage of their loan book last year but the bottom line was not affected due to hefty capital gain by COM Bank stake. Still they are sitting on a pile of cash which will be used in the days to come for the betterment of the Bank.
In the discussion "Prince" suggested a merger, however, it is very unlikely that DFCC and DFCC Vardhana Bank (DVB) merged together in next three to five years (or forever). CBSL approved the acquisition of 100% stake in DVB and DFCC already owns 98%+ of DVB. Apart form that DFCC in the only surviving development financing institution in the country and that will act as the showpiece for government/CBSL to attract low cost credit from multilateral agencies/banks such as ADB/EIB/JBIC/IBRD/FMO/KFW etc...So the merger is highly unlikely in medium term.
Now the share is trading at 52 week low, in case you have some more money to invest it is always better to buy some and bring the average down.
Facts to consider...
1. The expansion in the economy, this is common to all banks but DFCC has its specialization in project finance.
2. Exclusive availability of low cost funds. (You may have seen the recent newspaper add on EIB credit line)
3. Growth of DVB (In early 2000s it was the failed Merc Bank from Mr Moragoda. Now it is a fast growing bank with over 100 service points) and the synergy of two banks.
4. Growth of Acuity Partners (50% owned by DFCC)
5. Income of the associates (LVL, Namal & Lindel)
6. Strategic investment in COMbank.
These are the facts that I would consider before jumping into the water. Think and decide I am already in the water and my average is at the deep bottom.